Total assets managed by the top 100 alternative investment managers globally reached US$3.1 trillion in 2012, according to research produced by Towers Watson and published in conjunction with the Financial Times.
The Global Alternatives Survey which covers seven asset classes and seven investor types shows that of the top 100 alternative investment managers, real estate managers have the largest share of assets (34% and over US$1 trillion).
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Real estate managers were followed by direct private equity fund managers (23% and US$717 billion), direct hedge funds (20% and US$612 billion), private equity funds of funds (PEFoFs) (10% and US$315 billion), funds of hedge funds (FoHFs) (6% and US$176 billion), infrastructure (4% and US$128 billion) and commodities (4% and US$118 billion).
Data from the broader survey shows that total global alternative assets under management (AuM) is now US$5.1 trillion and is split between the asset classes in similar proportions to the top 100 alternative investment managers, with the exception of real estate which falls to 26% and direct hedge funds which increases to 26% of the total.
Craig Baker, global head of research at Towers Watson Investment, said: "For almost all of the past 10 years of this research we have seen increasing allocations to alternative assets by a wide range of investors.
"Not only has the appeal of alternative assets broadened to include insurers and sovereign wealth funds, but the range of alternative assets has also increased beyond the likes of real estate and private equity to include direct hedge funds, infrastructure and commodities. It is therefore not surprising, that allocations to alternative assets by pension funds for example now account for around 19% of all pension fund assets globally, up from 5% fifteen years ago," Baker added.
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By GlobalDataAccording to the research report, pension fund assets represent over a third (36%) of the top 100 alternative managers’ assets, followed by wealth managers (19%), insurance companies (9%), sovereign wealth funds (6%), banks (5%), funds of funds (3%) and endowments & foundations (2%).
Craig Baker said: "Pension funds have always been and will remain a very large investor group for top alternatives managers, but the demand from non-pension fund investors, such as insurers, endowments & foundations and sovereign wealth funds, is only going to increase in the future."
In terms of geographical classification, North America continues to be the largest destination for alternative capital (46%), with infrastructure as the only exception where more capital is invested in Europe, the report says.
Overall, 37% of alternative assets are invested in Europe, 10% in Asia Pacific with 7% being investing in the rest of the world, Towers Watson report revealed.
Data from the wider survey also shows that at the end of 2012 the top 25 managers of wealth management assets managed US$426 billion, followed by the top 25 managers of insurance company assets (US$244 billion); the top 25 managers of bank assets (US$160 billion); the top 25 managers of sovereign wealth assets (US$154 billion); the top 25 managers of fund of fund assets (US$118 billion); and the top 25 managers of endowment and foundation assets (US$72 billion).
According to the research, Macquarie Group is the largest infrastructure manager with around US$95 billion and tops the overall rankings, while CBRE Global Investors with US$80 billion is still the largest real estate manager.
Goldman Sachs is recognized as the largest private equity manager in the ranking on US$68 billion with AlpInvest Partners as the top PEFoF with US$44 billion.
Also, Blackstone Alternative Asset Management is recognized as the largest FoHF with US$45 billion, while Bridgewater Associates is the largest hedge fund with US$84 billion. BlackRock which manages US$74 billion is acknowledged as the largest commodities manager.
